A Look Back
Posted: Jared Jameson
Another decade came to a close last year. I thought it would be interesting to compare the last decade to the previous four decades. The table below shows returns for 5 primary asset classes and a globally balanced 60% stock/40% bond portfolio. For each decade the highest returning asset class is at the top while the lowest returning is at the bottom.
A few observations:
Of course, what really matters is the returns over the coming decade. One thing is for sure. Bond returns will be much lower for the next decade and the impact on a global diversified portfolio will be significant. Also, it is likely high valuations in the US stock market and corresponding bargains in emerging markets will continue the flip flop pattern we’ve seen over the past decades. Finally, through the magic of diversification, a diversified global portfolio will provide a return somewhere in the middle with reduced risk.